Strategy shift helps lift Neonet

Swedish-based agency broker Neonet has said
its turnaround strategy is working well, after making a series of new
partnerships and technology advancements over the past year.

The broker had struggled since it was
delisted following an acquisition by technology provider Orc Group in 2010.

However, when Orc was bought by private
equity investor Nordic Capital in 2012, Neonet was spun out and sold to another
consortium of private equity investors.

CEO Tim Wildenberg, formerly head of
electronic trading at Citi, was appointed to run the business in summer 2013
when he told theTRADEnews.com he intended to put Neonet “back on the map”.

"We've been very busy over the past 18
months, reorganising internally and strengthening our sales team, as well as
forging new partnerships and this has contributed to achieving our first break
even month and all the signs are positive for the business going forward,"
he said.

Wildenberg has opted to focus on the firm’s
core business of providing algorithmic trading and electronic execution while
also partnering with other businesses that can offer additional services and
functionality that benefit its customers.

Third-party
deals

One such area is commission sharing
agreements (CSAs), which are set to become much more important for buy-side
firms due to proposed new rules on using commissions to pay for research as
part of MiFID II.

Last month, Neonet struck a deal with Commcise
to provide CSA services to its clients.

Wildenberg explained, "The CSA game
has become more intense, so we stepped up our game with our partnership with
Commcise. Clients particularly like that it's effectively an interoperable
solution that can used with other brokers to help standardise the way they deal
with CSAs."

He added, “The UK has been leading the way
on unbundling research and commissions but it has generated a lot of debate in
the Nordic region and people are coming round to this new, more transparent way
of paying for research."

The firm is also broadening the
connectivity it provides to clients by providing access through other execution
management systems (EMS).

"We've been working to broaden our
reach. In the past we have relied heavily on our own EMS the Neonet Trader,
which is a great product but as a firm we have not been connected as many of
the other EMSes in the market. Now we're widening the connections available to
our client base as well as making sure we have access to all the latest
features being developed in the EMS space," Wildenberg said.

The firm has also opted to bring in a
third-party to provide transaction cost analysis, LiquidMetrix. Wildenberg said
the partnership is enabling Neonet to reduce its standard deviation and achieve
better execution more of the time.

Trading
beards for moustaches

Lastly, Neonet is taking part in Movember
this month, an annual event where men (and women) grow moustaches in order to
raise money and awareness of prostate cancer and depression among men.

While persuading Swedes to trade their
beards for moustaches was a challenge for Wildenberg, over half the Neonet
office are taking part and are currently ranked third in Sweden, having raised
over €5,000 for the Movember Foundation.